Japan Machinery Orders Implode As Global Economy Grinds To A Halt

Tyler Durden's picture

Japan's core machinery orders were expected to post a modest -2.6% drop. Instead they had a worse collapse than anything seen in the aftermath of the Fukushima disaster, plunging by a stunning 14.8% . And the kick in the groin cherry on top was the current account surplus plunged by 62.6%: consensus forecast: -14.5%. The Japanese economy has once again ground to a halt, only this time it has no earthquake or nuclear explosion to blame. This time it is the entire world's fault, where demand has collapsed proportionately. As a reminder the BOJ expanded its QE yet again on April 27. Must be time for another QE because this time will certainly be different after more than 30 years of failures.  It is time for those brilliant central planners Ph.D's to do engage in more of the same insanity that Einstein warned about decades ago. And incidentally this is not a joke: on Thursday the BOJ is expected to ease yet again. As a reminder, the BOJ already buys ETFs, Corporate Bonds, and REITs. What's left: gold?

Instant View via Reuters:


"The numbers are weak. Although the BOJ tankan indicated stronger (capital spending), uncertainty about the outlook for the overseas economy is making Japanese companies cautious. "Things won't be as strong as the tankan suggested. We didn't think capital spending would be that strong, because we can't expect much growth in overseas economies. "The pace of capital spending is gradually becoming weaker. "We believe that BOJ will loosen monetary policy (at Thursday's meeting)."


"Looking at the May figure alone you may say that machinery orders were weak, but given that the data is volatile you cannot say capital spending is losing momentum. "Corporate capital spending remains in a moderate uptrend as the Bank of Japan's June tankan confirmed, although the pace is tepid and levels are below those seen before the Lehman crisis. "Public spending and personal consumption are driving the Japanese economy but economic growth is likely to slow after the summer partly as government subsidies for low-emission cars run out of money. You cannot expect much from exports given uncertainty over Europe and the global economy. "The BOJ is likely to sit tight this week given the current yen movements, but it could ease policy further as early as September if it becomes clearer that the economy is slowing down."


"Machinery orders from both manufacturers and non-manufacturers fell a lot. External demand looks weak. A lot of companies have turned cautious about overseas economies. The global economy is weaker than we thought. "Machinery orders suggest capital expenditure is weaker than what companies indicated in the most recent Bank of Japan tankan survey. This suggests that capital expenditure plans in the tankan are likely to be downgraded. "The current account surplus took a hit from imports of liquefied natural gas. Prices for these imports should start to follow oil prices lower. "There are increasing worries for the Japanese economy. The BOJ looked like it would be on hold this week, but given weak U.S. economic data and monetary easing by central banks in China and Europe, there is now a 50 percent chance that the BOJ could ease this week."

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GetZeeGold's picture



Take five.....smok'em if ya got'em.


stant's picture

take 5, wont last a minute

Ahmeexnal's picture

Ogolfer issues a stealth executive order on Friday: all communications will be controlled during the upcoming "crisis":


Ineverslice's picture

There he goes again.... Seal the compartments, prepare for cold shutdown everyone. 

TrainWreck1's picture

Just download everything* before the plug gets pulled.

*only half-joking

Prometheus418's picture

Check out Tor and i2p.

Depends on what they do- tor will bypass any firewall restriction I've encountered, provided that the connection exists.  It's very good at sneaking you out the back door with your identity hidden.  The public version of it was developed to help those in countries with repressive regimes communicate across borders.  I'm sure it's not bullet proof, but AFAIK, it's very good, and they even make it for your smartphone, if you're so inclined.

i2p is a different matter- it's nowhere near as anonymous, but it does set up peer-to-peer tunnels to sidestep firewalls.  I believe the point of it was to make sure that your ISP doesn't know exactly what you're doing for people who are pirating media, but I honestly don't know all that much about it.

Either one requires some self-discipline, so read the instructions carefully if you decide to use them.  I run encrypted connections off an entirely different computer just to make sure that there is no cross-contamination like cookies or other nonsense.  It certainly does not improve your everyday experience for things like reading the news and buying something from Amazon, and it doesn't make sense to use it for that.   Those tools are for more specific and more private communication.  A decent idea might be to have a bootable USB with an entirely different operating system (Linux is free, and comes in a lot of different flavors) that is dedicated to encrypted use- then you don't need a different machine.  I just happened to have an old one that would do the job.

And before you ask, no, I don't use either one to post on Zerohedge, so please don't get any wonderful ideas about posting all my personal info just to show you could use a whois.  If anyone is watching, that cat was out the bag long ago- no reason to tie it to anything else that is more secure.

Cursive's picture


Check out this new service:


Looks promising if you want to have a *secure* conversation.

Estrella's picture

In response to Ahmeexnal's post about the latest executive order... someone please show me where I am wrong or being foolish.

Dec - Obama signs executive order allowing takeover of five parts of US Economy based on DHS determination of possible emergency.

Jan'ish - Obama signs law allowing for indefinite detention without charge of US citizens alleged to be enemy combatants.

Mar'ish - DHS orders 450 million hollow point .40S&W (a non-military round) and tens of thousands of M-4s

Apr'ish-May'ish - Military exercise in Tampa, Chicago and St. Louis

May'ish - SCOTUS decides it is acceptable to strip search, body cavity search, anyone detained by polic.

Jul - Obama signs executive order allowing control of airwaves, again based on DHS determination. Includes shutting down radio stations.

So... where am I obviously making a logic error here?

FL_Conservative's picture

The Fed is NOT printing any time soon, Fo-get about it!  They realize at this point it accomplishes NOTHING and so they will do NOTHING until we're on armageddon's doorstep.  That little bitch Hilsenrath will be proven wrong.....again.

Seer's picture

How sure are you?

The only gains to be had are via currency devaluation, or haven't you heard about that?

And when everyone else is crushing their currencies then keeping up with the Joneses doesn't make you look so out of place.

BTW - We ARE on Armageddon's doorstep.  The door is unlocking...

Mitzibitzi's picture

The door's unlocked. All we're waiting for now is for the doorman to finish checking his guest list.

OmNamah's picture

Mark my words, Japanese equities would bottom this year and would be one of the best performing equity markets in coming years.......as a speculator you can't let these once in lifetime opportunities slip by......please open your eyes and make money instead of ideas:)



heavenskrow's picture

Sorry Japan...I love you

knukles's picture

Wish I could arrange a 220 zap for every time one of them folks has told me I'm an idiot only to have the forecast come true.....
World's imploding.
Not a very big insight, either.
Is simply the global debt deleveraging taking it's ultimate course, regardless of idiotic policies... which are only making it worse.

Ya'll realize that with what's happening, with all of the impending, as in a matter of when, not if, downgrades of goobermints and companies, what the demand for eligible collateral is gonna be?
Bunds, Swissy, Guilts, Treasuries, OZ gonna all be bid to negative yields as demand increases for the shrinking subset of "the eligibles" with rational counter-parties.
It's a different world, folks.

Dr. Sandi's picture

Dammit Knuckles. Stop making those forecasts. It's YOUR FAULT that they're coming true. You're going to wreck everything with all your truthmongering.

Cheesy Bastard's picture

Yeah.  It's just a 30 year soft patch.

knukles's picture


You know, several of my uber-liberal O supporter buds have in all seriousness told me that.
I need to cheer up my forecasts,,, that I'm too cynical.
Seriously... its all Knukles fault 


And now my neo-CON buds are mad at me because I'm telling them that nothing's gonna change if Romney gets elected.

Fucking blind people fully immersed in the Matrix, in full bore Hegelianism

DoChenRollingBearing's picture

@ knukles

Maybe I can get bearings for a little cheaper from Japan now.

Ahmeexnal's picture

New batches of Japan made bearings glow in the dark.

Actually, so does recently made wasabi.

tmosley's picture

That stuff's so spicy it'll give you CANCER!

HurricaneSeason's picture

So, IOUs will become more and more valuable as they are printed faster and faster?  U.S. treasury bonds will be a required investment, eventually.

Arnold Ziffel's picture

at least housing has bottomed.......NOT!

OmNamah's picture

Mark my words, Japanese equities would bottom this year and would be one of the best performing equity markets in coming years.......as a speculator you can't let these once in lifetime opportunities slip by......please open your eyes and make money instead of ideas:)



LongSoupLine's picture

People, people...calm down.  Don't you know they've fired the nuke reactors back up?

Everything's fixed.

Barometer's picture

That Hugh Hendry is crazy

heavenskrow's picture

keep him on the DL.   Don't make him a blown up Jim Rogers

Ineverslice's picture

-14.8%...Ouch!  Paging Dr. Hendry.... and get K. Bass on standby, on the double!

Ooops,  beat me to it. Well, off u go!

Henry Chinaski's picture

More hoax from ZH. Nice. /sarc

Got cash bitchez?

Ahmeexnal's picture

You don't need cash. All you need is toilet paper and a printer.

ZeroAvatar's picture

Dammit, that's plagiarism!  No 72 virginians for YOU when you die!

Seasmoke's picture

this news could make people become kamikazees

Oh regional Indian's picture

Japan's already sky-high suicide rate has sky-rocketed further.

As has the US's. As has India's. In fact, here in India, it is soon to be a leading cause of death in the 18-35 category. More than disease and accidents, suicide.

That is the world free-energy tends to create. Dystopia.



midgetrannyporn's picture

I don't think the average old person in Japan gives a flying fig what the BOJ does. They hoard yen and wait for death.

TrainWreck1's picture

Nobody can afford the stuff that is made now.

Why buy machinery to make more stuff that people cannot buy?

HyperLazy's picture

I am still workin overtime in my employers tooling shop filled with Mitsubishi SZ Wire EDM machines. Finest iron that ever came out of Japan. The only parts we have had lately are components for medical and oil.

TrainWreck1's picture

Medical & oil have margins that can absorb US tooling costs.

Most everything else gets designed here and the tooling is done in China

(plus they keep the tools and copy the designs, but that doesn't matter for this quarter's numbers)


I can see some Japanese mfg moved to the US as a consequence of Fuku, but mostly for keiretsu.


Wakanda's picture

"What's left: gold?"

Abso fucking lutely!  Belly up to the market and bid away.